Thursday, January 03, 2013

The main issue with the sale of town council management software to a PAP owned company with a clause that gives the PAP company the right to terminate use of the software if an opposition takes over the town council is that of conflict of interest. It is equivalent to the Democratic Party selling the US Social Security computer software to a company it owns then giving the company the right to stop the Republicans from using it when it recaptures the presidency in elections. The AIM deal gives enormous power to the PAP to stop the opposition from running the town councils effectively when they are chosen by the constituents to be representatives in parliament. Therein lies the conflict of interest. The rights of the people are not protected and they are put at risk.

"Dr Teo has now confirmed that this third party, AIM, is “fully-owned” by the PAP. In other words, the PAP-managed Town Councils saw it fit to sell away their ownership of the systems, developed with public funds, to a political party, which presumably could act in its own interests when exercising its rights to terminate the contracts". - Sylvia Lim, WP Statement

Professor Teo Ho Pin's 26 paragraph explanation does not address this conflict of interest issue which was the main point brought up by Sylvia Lim. I really you suggest you read his statement in full to understand what he is saying[Why the PAP town council entered into transaction with AIM]. I challenge you to find the logic in his statements that can explain that no conflict of interest has occurred.

In skirting the central issue, Teo Ho Pin's 26 paragraphs detailing PAP's Town Councils rationale and timeline for the sale really gives us an insight on how a PAP elite thinks and make decisions. I would like to share my thoughts as I run through his 26 paragraphs. As usual, here is a summary:

In 2003, PAP town councils wanted to "harmonise" their computer systems and jointly called an open tender for a computer system based on a common platform. It is strange that these systems are stove-piped and harmonisation is done on hindsight. The head of PAP town councils didn't have the foresight to achieve cost savings and cost sharing by getting the town councils to work together?

NCS was chosen to provide this system from Aug 1, 2003 to Oct 31, 2010, with an option to extend the contract for one year.

Teo does not tell us how much NCS is paid to develop the system. This piece of information is of public interest. We would like to know how much money is spent on such a system when it is sold for $140K

In 2010, PAP town councils jointly appointed Deloitte and Touche Enterprise Risk Services (D&T) to advise on the review of the computer system.

After a comprehensive review, D&T identified various deficiencies and gaps in the system which was becoming "obsolete and unmaintainable".

After just 7 years of use, the system is "obsolete and unmaintainable". Let me ask you a question : How many new services did you receive from your town council in those 7 years? Town councils do the same thing year in-year out like landscaping, clearing rubbish, collecting conservancy etc but the NCS software becomes "unmaintainable".

After a comprehensive review, D&T identified various deficiencies and gaps in the system. The main issue, however, was that the system was becoming obsolete and unmaintainable. It had been built in 2003, on Microsoft Windows XP and Oracle Financial 11 platforms. By 2010, Windows XP had been superseded by Windows Vista as well as Windows 7, and Oracle would soon phase out and discontinue support to its Financial 11 platform. - Teo H P.

Teo Ho Pin further elaborates on this saying D&T main finding is that Windows XP and Oracle Financial 11 platforms would be superseded. I'm quite surprise that they have to pay expensive consultants to find this out - something you can know by spending 10 minutes reading Microsoft's and Oracle's roadmap online. The important thing to note is when these products are superseded by new ones e.g. Windows 7, these vendors will keep their products backward compatible so that custom software written for Windows XP and older version of Oracle will still work on new versions. Companies that do not want to waste money simply stick to Windows XP (I'm sure many of you work in companies that still uses Windows XP) and older versions of Oracle so long as they get the job done and have no major issues.

In moving custom software to a new version of operating system and Oracle database, all that is needed for total assurance is some software porting, if necessary, regression testing which can be done by NCS.

D&T suggested the option of having a third party own the computer system, including the software, with the town councils paying a service fee for regular maintenance.After serious consideration, the PAP town councils decided to call for a tender under which only the intellectual property in the old software would be sold. The ownership of the physical computer systems remained with the PAP town councils.

Teo H P says that shared ownership of IP (Intellectual Property) is "cumbersome". Why? The PAP Town Council has been sharing the IP for 7 years before they tried to sell it off.

This is a strange recommendation by D&T. Post 1990s software is written for re-use. Rarely in the software industry do we see new versions of software written from scratch - it is a massive waste of money. For Town Council management software you can imagine that 80-90% of the original written code can be reused given they do the same thing year after year -day in day out . Selling the IP to a 3rd party to far below cost of development does not make sense because you sign away your right to use the old source codes. Now you pay the price of full development of new software.According to Teo HP, D&T recommended that the "unmaintainable" software ownership be moved to a third party to own and "provide regular maintenance". Somehow AIM, a $2 company without a permanent office is able to maintain an "unmaintainable" software. It turned out AIM did this by signing up NCS to do the maintenance. The town councils engage NCS through AIM rather than directly and that is more efficient?On June 30, 2010, PAP town councils advertised the tender in the Straits Times. Five companies collected the tender documents: CSC Technologies Services, Hutcabb Consulting, NCS, NEC Asia and Action Information Management (AIM). On July 20, 2010, AIM submitted a bid which was the only one received by the town councils. After assessing that AIM's proposal was in the PAP town councils' best interests, the tender was awarded to AIM.

Teo H P explained that the Town Council saved $8000 in the leaseback without the considering the loss of intellectual property with the potential of reuse in a new development. Teo does not tell us the cost of developing the original software. He does not tell us how much it pays consultants for what looks like trivial findings and simple decisions. ....but I'm still glad he took the trouble to write his 26 paragraphs. It tells us the PAP Town Councils are not very good at saving costs for residents and residents have to pay more and more each year for the same services. Reading the 26 paragraphs tells us cost cutting and keeping expenses low for residents does not seem feature in their thought processes.

69 comments:

Anonymous
said...

Too many holes in the statement. many questions not answered and many documents need to be made public. Hence a commission of Inquiry should be called.Another good rebuttal is here.http://www.scribd.com/doc/118691311/Town-Councils-AIM

If you would refer to the dates stated in the tender 2010 and the study 2010, there is no conflict of interest as no opposition town councils were involved in the setup of the TC systems in the first place.

Further, if any opposition were to take over, they will have to consider carefully, so to me the clauses serve the interest of any takeover on both sides.

If the system were jointly developed with all town councils inclusive of Hougang there would be conflict of interest since the minority interest is not taken care of.

To me the obscufation of the dates does not do justice to your blog entries but which basically panders to the us vs them and to me reminiscent of the Democrats vs Republicans or etc mentality.

In contrast to what your title suggests, you have successfully argued that the explanation explains a lot. Namely that the PAP are not very capable at supervising relatively simple (though possibly large) projects.

This leads to the question: If you can't handle a simple project, how can you manage a complex economy? (And look at all the failures in long term planning and uncoordinated action.)

It's disgusting to see PAP playing politics at the expense of the people, it's even more disgusting to see main stream media reporting only the PAP's "explanations" without mentioning all the issues highlighted in online media!

But, the most frustrating thing is we've morons like theonion defending such obvious wrong act of the PAP!

They can even change the constitution such that when any PAP minister killed/murdered/slaughtered a non pap minister will not be guilty or have immunity just like ambassordor. People bought it upon themselves when they voted so many of them into parliament.

The conflict of interest arises as soon as opposition take over a PAP town council. The date when the AIM deal is concluded bears no significance on the said post-deal conflict. You must be a twig to not understand what is a post-deal conflict.

Since when is it blind support.in this case you are no better than the mirror image.

My comment was based on the facts not the intermingling of other queries.

Lucky, a side query than i think that during the rallies, there was suggestion of amalmagation of resources with the Hougang constituency.

Would this not create more work in smoothing systems.

Frankly after the detailed dates and timings, this is storm in a teacup created to create interest on other areas rather than the areas of concerns considering that both sides in the correspondence were playing ball as per the agreements.

Since this seems to be a winner takes all mentality, than so be it, would opine that the facts and dates do not seem to support your rheotorical conclusions.

I don't really like where the whole episode is going here. A lot of technicalities being argued forth, the most damning problem is this: There had been longstanding precedent cases where the Potong Pasir and Hougang SMCs were concerned.

In fact, I do find this entire political drama really draining to the eye because I'm no longer interested in the technical issues since we're talking about the most basic expectations coming from the people on the Gov's integrity. In short, someone should just order an independent audit and do away with the needless rest. But still, this very statement is rather worrying:

[On July 20, 2010, AIM submitted a bid which was the only one received by the town councils.]

I was an ex-oracle ERP consultant until a few years ago and I think I must share my 2 cents' worth of thoughts to put the whole thing in perspective.

1) Just a short intro, Oracle Financials consists of a main module (general ledger GL) and a few subledger modules such as receivables AR, payables AP, assets FA, cash management CM, projects PA. Oracle is the vendor and NCS was the licensed implementation partner for the town councils. Oracle Financials is a enterprise resource planning software (ERP) system and as such it is very huge and complex system, and usually used by large MNCs or GLCs as the licensing fee is not cheap, esp for multiple sites. The system would never have been written from scratch by NCS, rather it is a packaged software written by Oracle, and NCS merely provided consulting and implementation services, which might have included a certain degree of customisation of screens and/or reports.

2) Having said that, I am surprised that the TCs asked NCS to implement Oracle 11 in the year 2003. Oracle 11 was a client-server system and I was already implementing Oracle 11i (web-based system which supercedes Oracle 11) in the year 2001. Needless to say, this client-server system which was in place from 2003 to 2010 is a very obsolete system by today's standards and knowing how Oracle is like, Oracle would have discontinued support for this dinosaur years ago.

3) Why didnt the TCs ask for a more up-to-date version of the system in the year 2003 when it was first implemented? What intellectual property rights is AIM talking about, given that this is a packaged software written and marketed by Oracle, unless they are referring to customizations done by NCS, but not supported by Oracle.

4) The cost of this Oracle ERP system would be in the range of hundreds of thousands, if not, million dollars. Oracle licenses its software by number of users or sites. So did AIM get a cheap deal by paying 140k after 7 years? Not necessarily, bcos it is already an obsolete system in urgent need of upgrade or re-implementation. In fact, it is a system which should be written off, zero value! But of cos, the data within, is very valuable. But does AIM have the expertise to run this dinosaur system? Definitely not! It would require a team of support consultants who are still well-versed in Oracle Fin 11 to maintain it, and the town councils would probably be the only "company" in whole of SG who is still running Oracle Fin 11.

So what exactly is the 140k for? You know, I know, everybody knows, except PAP.

The papist Leegime is screwing up Singapore and Singaporean big time. The sooner they are kicked out the better it is for Singapore and Singaporeans.It is sad to see the once mighty and talented pap being reduced to a mere shadow of its' former self. Greed and power not only corrupt but they are corrosive to the brain and soul.

Nobody seems to have picked up on what was (to me) the most glaring contradiction in the statement. In paragraph 22, Teo writes the following: "AIM could terminate by giving one month's notice in the event of material changes to the membership of a TC, or to the scope and duties of a TC, like changes to its boundaries. This is reasonable as the contractor has agreed to provide services on the basis of the existing TC- and town-boundaries, and priced this assumption into the tender. Should this change materially, the contractor could end up providing services to a TC which comprises a much larger area and more residents, but at the same price."

But by all accounts, every TC was charged the same amount(S$785/month), so clearly the number of residents and the size of the area are both irrelevant.

The fact that Tep's explanation was not featured in the front page of their controlled newspapers tells you that they do not have valid points. We must now show Lucky's good investigative work to the daft 60.1% to help educate them.

"Be that as it may, but don't forget Professor Teo had 66% voters' mandate not to address this conflict of interest issue."

"Teo got 66% votes in GE 2011, and higher than the overall 60% for PAP.

This materially of course, is of utmost relevance."

I find it irrelevant the percentage of votes Teo gets. It has already been shown that he will screw the 60% to get at the other 40%. So why would it matter even if he gets 80%. He will still screw 100% of them.

Hi Lucky, You mentioned that companies that do not want to waste money simply stick to Windows XP. Sometimes, a company has no choice but to upgrade to a new OS, eg, when the aging computer needs to be replaced. Windows XP may not have the software drivers for the new computer. The driver can be network driver, printer driver etc.

Are you saying that it's okay for the PAP government to sell the utilities (water, electric, transport) to PAP owned companies for a song? This is clearly a conflict of interest. In many countries, such deals are a no-no.

Teo Ho Pin should come clean by publishing the FULL D&T report. He is cherry picking individual snippets to make his case. But the devil is in the details and he is afraid of sharing. Once we read the full report, he will have no place to hide under the sun. A typical report includes dozens of scenarios that are NOT recommended by the author(s). (For example, try reading the prospectus of an IPO or any public offerings.)

Where is CPIB when you need it? Where is LHL when the target is PAP cronies?

"The AIM deal gives enormous power to the PAP to stop the opposition from running the town councils effectively when they are chosen by the constituents to be their representatives in parliament."Lucky Tan

If that is the case, then the opposition will have to stop the root cause, which is the PAP.

How?

Win over the 60% from the PAP, that's how. Or at least win the by election, if there is one.

Even if internet is 99% anti AIM, anti PAP, anti $2 company, or anti whatnot, got use or not?

"The public tender, which was advertised in the Straits Times, stated that the tender would close on 14th July 2010, but according to Teo, AIM submitted its bid on 20th July. Why was AIM given 6 extra days to submit its bid? Did the TCs give other potential bidders extra time to submit their respective bids?"

These TCs are under MND and yet our top-notch Civil Servants in MND didn't get a whiff of "Conflict of Interest" risk?

Where are the public institutional checks-and-balances on the Executive?

Despite Dr Teo ho-pin that his 26-page statement will silence this debate, more worthy netizens have come forth to poke even more holes to expose the deep chasm that this Pay And Profit (PAP) Govt have dug for Singaporeans to be in deep s**t.

Dear Singaporeans, I would like to bring to your attention that there is a potential case against the transaction between the Member of Parliament(PAP), Dr Teo Ho Pin and Mr Chandra Das, directors Lau Ping Sum and Chew Heng Ching, who are PAP members.

Looking at the circumstances, I think the sale of the town council management software to a PAP owned company by a PAP MP was a criminal conspiracy aimed at weakening another entity through subversion, obstruction, disruption, or destruction under the guise of legal authority.

This being the case, it necessarily contravenes the country's laws underthe Parliamentary Elections Act (CHAPTER 218). Pls take a look below.

58.—(1) A person shall be guilty of treating if he corruptly, by himself or by any other person, either before, during or after an election, directly or indirectly gives or provides, or pays wholly or in part the expense of giving, any meat, drink, refreshment, cigarette, entertainment or other provision or thing or any money or ticket or other means or device to enable the procuring of any such meat, drink, refreshment, cigarette, entertainment or other provision or thing, to or for any person —(a) for the purpose of corruptly influencing that person or any other person to vote or refrain from voting;(b)for the purpose of inducing that person to attend or remain at any election meeting;(c)on account of any such person or any other person having voted or refrained from voting or being about to vote or refrain from voting at the election; or(d)on account of any such person having attended an election meeting.(2) A person shall also be guilty of treating if he corruptly accepts or takes any such meat, drink, refreshment,cigarette,entertainment or other provision or thing or any such money or ticket or who adopts any other means or device to enable the procuring of such meat, drink, refreshment,cigarette,entertainment or other provision or thing.

59. Every person who —(a)directly or indirectly, by himself or by any other person on his behalf, makes use of or threatens to make use of any force, violence or restraint, or inflicts or threatens to inflict, by himself or by any other person, any temporal or spiritual injury, damage, harm or loss upon or against any person in order to induce or compel that person to vote or refrain from voting, or on account of that person having voted or refrained from voting at any election; or(b)by abduction, duress or any fraudulent device or contrivance, impedes or prevents the free exercise of the franchise of any elector or voter, or thereby compels, induces or prevails upon any elector or voter either to vote or refrain from voting at any election,shall be guilty of the offence of undue influence.

It is equivalent to the Democratic Party selling the US Social Security computer software to a company it owns then giving the company the right to stop the Republicans from using it when it recaptures the presidency in elections. The AIM deal gives enormous power to the PAP to stop the opposition from running the town councils effectively when they are chosen by the constituents to be representatives in parliament. Therein lies the conflict of interest.

I believe you are talking about different things here. You do not have to dramatise to the end of the universe and wail like someone has died to muddle up the arguments when the issue is merely about the ownership of the software, who paid for the project. Your US Social Security and Republicans presidency grandfather stories, please save them for your next boy's scout camp.

"Teo said AIM was considered because “we were confident that AIM, backed by the PAP, would honour its commitments.”

We have here a prime, shining example of Singapore's system of meritocracy. A company, helmed by meritocratic directors, winning the Town Council's tender should not be questioned by anybody because what makes Singapore works is unquestioningly Meritocracy. Experience, expertise and adequate capitalisation and staffing are not material when having 3 meritocratic directors holding proxy for the meritorious ruling party is what really counts. Similarly those who dare question the appointments to Temasek Holdings also deserve a letter from the PM's lawyer lest the citizenry forgets that Meritocracy is the bedrock for the foundation of Singapore; and No Question about it.

BRAVO Lucky, BRAVO! What many men on the street mumbled about "story telling politicians" have been clearly and concisely exposed in your little red paragraphs. Now all the fawning Economist magazines of the western world can still carry PAP's ass, but the smell of a wasteful, unaccountable, "tax-when-it pleases-them" and "tax when problems arise" bunch of idiots have been exposed forever. Shame on those of you in the town councils who kept mum and allow yourselves to be taxed higher in town council fees, you deserve it for keeping quiet.

/// Similarly those who dare question the appointments to Temasek Holdings also deserve a letter from the PM's lawyer lest the citizenry forgets that Meritocracy is the bedrock for the foundation of Singapore; and No Question about it.6/1/13 15:47 ///